New Worker’s Compensation Insurance Tax Goes in to Effect

We’re in a recession, right? Yet, another tax has been added to worker’s comp policies. It is less than 1%, but it will be another in a list of about 12 fees that are now tacked on to the cost of a Work Comp Policy.

Another reason why California is so expensive.

December 14, 2009

PARK FAMILY INS & FINANCIAL SVCS INC

Dear Broker,

Beginning in 2010, your clients will see a new Labor Enforcement and Compliance (LEC) surcharge on their workers’ compensation policies. The LEC surcharge, signed into law as part of state bill ABX4-12 (2009), will fund the Division of Labor Standards Enforcement (DLSE), an agency that works to ensure compliance with wage and hour standards. All California workers’ compensation carriers are required to collect this surcharge from their policyholders.

The LEC surcharge takes effect for policies incepting on or after January 1, 2010. The amount that insurers are required to collect for this surcharge is a factor of 0.001924 of an employer’s premium. For more information about surcharges, click on the link below:

http://www.scif.com/pdf/e15311.pdf